Columbia Threadneedle Investments has launched its first actively managed, semi-transparent ETF, the Columbia Seligman Semiconductor and Technology ETF (NYSE Arca: SEMI).
The firm writes that SEMI is a thematic, growth-focused technology strategy that will invest primarily in the securities of semiconductor, semiconductor equipment and related technology companies.
SEMI is managed by Paul Wick, Sanjay Devgan, Shekhar Pramanick and Christopher Lo. Wick leads Columbia Threadneedle’s Seligman Technology team, which is comprised of 11 investment professionals averaging 24 years of industry experience. Based in Silicon Valley, this team is one of the industry’s largest and most experienced managing technology-focused strategies, with USD17.8 billion in assets under management. With 32 years of investing experience, Wick is the longest-tenured mutual fund manager in the technology space, having managed the Columbia Seligman Technology and Information Fund (formerly named the Columbia Seligman Communications and Information Fund) since 1990.
“No longer viewed as a cyclical sector, semiconductors have established themselves as the bedrock underlying the disruption and innovation brought about by new technologies. We believe that semiconductors are a key driver of growth across the economy, from mobile handsets, PCs and robotic manufacturing to gaming consoles, electric vehicles and the metaverse,” says Wick.
“Even though the semiconductor sector has seen significant returns over the past decade, we believe it remains reasonably valued and quite profitable when compared to other technology sectors and the broader market. Plus, we believe the increase in end markets, alongside industry consolidation and high barriers to entry, bode well for potential future returns,” Wick says.
The portfolio management team seeks to find fundamentally attractive semiconductor companies and related businesses with reasonable valuations. SEMI is a concentrated, high-conviction portfolio consisting of companies with which the team has insight gained through deep fundamental research and industry knowledge. On average, the fund typically will invest in 30 to 50 companies, from small emerging businesses to more well-established mega-cap stocks, but may at times hold more or less securities than this range. The fund’s management fee is 75 basis points.
In addition to managing SEMI, the Seligman Technology team manages two mutual funds, Columbia Seligman Technology and Information Fund (CCIZX) and Columbia Seligman Global Technology Fund (CSGZX). The team also manages a closed-end fund, Columbia Seligman Premium Technology Growth Fund (NYSE: STK) and certain other vehicles.
Marc Zeitoun, Head of Strategic Beta and Private Client Advisory, says: “Grounded in the belief that investment insights matter, we have built a range of ETFs based on our conviction that we can improve conventional passive exposures with proprietary research and active portfolio management expertise. SEMI provides investors and their advisors with an opportunity to invest in companies that build the core technology powering nearly every disruption. We believe the actively managed semi-transparent ETF structure is right for this kind of solution.”
SEMI uses Fidelity’s active equity ETF methodology.